Colombo
Sri Lanka’s new government has received approval from the International Monetary Fund (IMF) for the fourth tranche of it’s nearly $3 billion bailout package. The staff-level agreement, announced on Saturday, will provide Sri Lanka with access to approximately $333 million, pending final approval from the IMF management and executive board.
The agreement follows a challenging period for Sri Lanka, which entered the IMF bailout program in March 2023 amidst a severe economic crisis. The previous administration, led by Ranil Wickremesinghe, faced criticism for implementing stringent reforms tied to the bailout. In the run-up to the September presidential election, the National People’s Power (NPP) and the current President Anura Kumara Dissanayake opposed the terms of the agreement, especially its tough reforms.
Despite these initial objections, the new government has confirmed its commitment to the IMF program. The IMF noted that the government’s commitment has boosted confidence and ensured policy continuity. According to the IMF, Sri Lanka’s economy has shown signs of recovery, with a growth rate of 4% in the year ending June 2024.
The IMF also highlighted that Sri Lanka’s debt restructuring agreement with private bondholders has placed the country on a path to sustainable debt. The new government is expected to focus on governance reforms, tackling corruption risks, and fostering inclusive growth as part of the ongoing economic recovery process.
